1. This is an appeal against an order passed by Coyajee J. making a notice taken out by the first respondent under Order 21, Rule 16 absolute. The plaintiff, who is respondent No. 3, filed a suit against the firm of Juharmal Sarupchand and against another defendant with whom we are not concerned, and a decree was passed -against the firm on 18-1-1955 for a sum of Rs. 31,435-11-0 and costs and interest, and the first respondent alleged that this decree was assigned to him by the third respondent on 19-7-1955, and basing his right to execute the decree on this assignment the first respondent took out a notice under Order 21, Rule 16.
The notice was issued against the appellant who is a partner in the firm of Juharmal Sarupchand against whom execution was sought, and as already pointed out that notice was made absolute by Coyajee J.
2. In showing cause two defences were taken by the appellant and the first was that an arrangement was arrived at while the suit was pending between the plaintiff and the appellant that in consideration of the appellant not defending the suit and not giving instructions to counsel who was appearing for the partnership the plaintiff will not execute the decree against the appellant, and it is the case of the appellant that pursuant to this arrangement he withdrew his counsel, no instructions were given for the defence of the suit, and the matter was left to the other partner of the firm who is the second respondent, and as it happened, the second respondent also ultimately did not defend the suit and the decree was passed against the firm ex parte.
Therefore, it is urged by the appellant that when the decree was assigned to the first respondent on 19-7-1955 the assignment must be subject to all equities to which the judgment-creditor Sa-want was subject, and inasmuch as he had agreed not to execute the decree against the appellant, the first respondent standing in the shoes of the decree-holder equally cannot execute the decree against him.
The second defence put forward by the appellant was that the first respondent, the assignee, was merely the benamidar of the second respondent and that it was at the instance of the second respondent who really paid the consideration that the third respondent assigned the decree to the first respondent, and what was contended was that if the real assignee was the second respondent and not the first respondent, this being a money decree passed against the appellant and the second respondent, the second respondent could not execute the decree against the appellant by reason of the second proviso to Order 21, Rule 16.
The learned Judge has taken the view that these defences cannot be gone into at this stage & that the only question that the Court has to consider when an application for leave is made under Order 21, Rule 16is whether the transferee of the decree establishes, his title as the transferee, and what is contended is that as soon as the assignment of 19-7-1955 was proved by the first respondent his title was established and it was incumbent upon the Court to make the notice under Order 21, Rule 16 absolute.
With respect to the learned Judge, the language of Order 21, Rule 16 makes it clear that what the Court has to consider is not merely the validity of the assignment but the objection if any put forward by the judgment-debtor against the execution of the decree against him. Therefore any plea that the judgment-debtor can validly put forward as to why the decree should not be or could not be executed against him must be heard and decided by the Court when an application for leave is made under Order 21, Rule 16.
3. It was suggested by Mr. Khambatta that the proper time to consider objections to the executions of the decree is when an application for execution is made under Order 21, Rule 11(2). It is clear that the scheme of the Civil Procedure Code is that a judgment-debtor ordinarily is not entitled to notice when the decree-holder seeks to execute the decree against him.
After the suit has been decided against him and the decree is passed against him, the law does not contemplate that he should be heard over again as to why the decree should not be executed against him. But to this general principle there are certain exceptions and two of the exceptions are embodied in Order 21, Rule 16 and Order 21, Rule 22.
Under these two rules a decree cannot be executed without giving an opportunity to the judgment-debtor of showing cause. Order 21, Rule 11 does not require any notice to be given to the judgment-debtor. When an application is made in the form set out under Order 21, Rule 11(2), the Court must make the order without calling upon the judgment-debtor to show cause, and therefore it is futile to suggest that an opportunity will be given to the appellant to put forward his objections to the execution of the decree at the stage when the transferee of the decree will apply for execution under Order 21, Rule 11.
Either the judgment-debtor must be heard at this stage or he cannot be heard at all. It was rather naively suggested by Mr. Khambatta that if an application for execution is made under Order 21, Rule 11 and the order is made for execution and the execution is not proper, then the Judgment-debtor can apply for setting aside the execution.
Surely, the Code does not contemplate that the right which the judgment-debtor has to object to the execution of the decree under certain circumstances should be relegated to a stage after the execution has already issued against him. It is before the issue of execution that the judgment-debtor must be given the right to put forward his objections.
4. Mr. Khambatta has relied on two judgments of this Court as supporting his contention that at the stage when notice under Order 21, Rule 16 is issued against the judgment-debtor all that has got to be considered and decided is the title of the transferee to execute the decree.
The first judgment relied on is the judgment of Kania J. reported in Bank of Morvi Ltd. v. R.P. Wagle & Co. : AIR1941Bom190 (A). On a casual reading of the head-note it may appear that the judgment lends support to the view contended for by Mr. Khambata, but when one carefully looks at the report itself, Kania J. really accepts the same view of the law which we are suggesting is the correct view.
In that case an application under Order 21, Rule 16 was made and certain objections were raised by the judgment-debtor, and Kania J. held that that wasnot the proper stage to consider the objections. But the facts of that case must be looked at in order to understand and appreciate that decision.
In that case the decree had to be revived under Order 21, Rule 22 and no execution could issue unless a notice was issued under that rule, and Kania J. in terms decided that an opportunity should be given to the judgment-debtor to put forward his objections when the notice under Order 21, Rule 22 came to be considered, and he also pointed out that ordinarily the judgment-debtor would not have an opportunity of putting forward his objections under Order 21, Rule 11 and under those circumstances he should be heard under Order 21, Rule 16, but as in this case he would have an opportunity under Order 21, Rule 22 he would not hear the objections at that stage but would hear them at a later stage.
This decision, far from helping Mr. Khambata, clearly establishes that an opportunity must be given to the judgment-debtor to put forward his objections before execution is issued under Order 21, Rule 11(2). To the same effect is the judgment of Wadia J. reported in In re Janki Prasad Poddar : AIR1937Bom365 (B). In that case Wadia J. points out that there are two stages by which a decree is executed when an application under Order 21, Rule 16 is made.
The first stage is that an application has got to be made to the Court which passes the decree, that Court has to hear the objections, and after disposing of those objections it has to make the notice absolute, and after that has been done an application for execution under Order 21, Rule 11 has to be made to the Court which is executing the decree. Therefore. Wadia J. also emphasises the fact that the Court to which the application under Order 21, Rule 16 is made has got to hear the objections put forward by the judgment-debtor.
5. In our opinion, therefore, the learned Judge should have heard the objections put forward by the appellant before making the notice absolute.
6. It is then contended by Mr. Khambata that the learned Judge has heard the objections and on merits has not been satisfied with those objections and has therefore made the notice absolute, in the judgment the only objection that the learned Judge has considered is the objection to the first respondent being the benamidar of the second respondent.
There, it may be said that the particular plea is based upon merely the statement made by the appellant in his affidavit. The learned Judge points out that although the appellant avers in the affidavit that the third respondent gave his information that the second respondent wanted the third respondent to assign the decree to the first respondent, the appellant has not produced any affidavit from the third respondent, and if the matter had rested there we might have taken the view that the learned Judge was satisfied that there was no substance in this objection.
But the learned Judge has not dealt at all with the more substantial and more serious objection taken by the appellant to the execution of the decree and that objection is, as already pointed out, that under Section 49 of the Code the first respondent has taken the assignment of the decree subject to all equities.
This arrangement on which the appellant relies viz., that the plaintiff agreed not to execute the decree against the appellant, is not based upon mere oral statements of the appellant. He actually relied on a letter written by the plaintiff to him on 2-11-1954 and annexed a copy of the letter to his affidavit.
Therefore, unless this document was a forgery or a fabrication, prima facie, there is a clear arrangement between the appellant and the third respondent whereby the third respondent agreed not to execute the decree against the appellant. Surely, this was a contention which should have been considered and heard on its merits.
Therefore, the learned Judge in our opinion, should have adjourned this matter to Court for the taking of evidence. We may point out that Mr. Khambata also wishes to contend that this arrangement of 2-11-1954, if proved, constitutes an arrangement for the adjustment of the decree when passed in the suit, and according to Mr. Khambata as that adjustment has not been certified that adjustment cannot be looked at by the executing Court.
We express no opinion on the validity of this contention. The learned Judge hearing this notice when it is adjourned to Court will consider the legal aspect of this matter.
7. We will therefore set aside the order passed by the learned Judge and direct that the noticetaken out by the first respondent should be adjourned to Court for taking evidence. The firstrespondent must pay the costs of this appeal.Liberty to the appellant's attorneys to withdrawthe sum of Rs. 500/- deposited in Court.
8. Order accordingly.